12th Dec 2008 07:00
LENI GAS & OIL PLC
12 December, 2008
SPAIN - INCREASED RECOVERABLE RESERVES TARGET & DEVELOPMENT PLANS
Leni Gas & Oil plc (LGO) the AIM listed international oil and gas exploration, development and production company, today provides an update on the results of a new interpretation on Ayoluengo remaining potential, a new Ayoluengo recoverable reserves target and update on plans for the development acreage.
As announced on 22 April 2008, a full re-interpretation of the Ayoluengo oilfield identified that only 17 million barrels of oil ("mmbo") has been produced from the field with a STOIIP ("stock tank oil initially in place") in the range of 93 - 116 mmbo.
A new study recently completed by Tracs International has mapped all historical production from the field across the four primary reservoir sands in order to identify where secondary recovery techniques would have the largest benefit and also the location of un-depleted zones. The results of this study will primarily be used to refine the planned enhanced recovery programs and increase the chance of success for the forecast production enhancements.
The study results show 90% of the recovered oil to date has been produced from the eastern flank of the field (15.5 mmbo) and an even split of 7.5 mmbo produced each between the primary Ayoluengo and Sargentes reservoir sands. The balance of 1.5 mmbo was from the other sands. The results also show that the main Ayoluengo reservoir has been effectively depleted by primary recovery with some areas particularly around the area of water injection depleted more than would be expected supporting the principle that water injection is beneficial to recovery.
The development program for the Ayoluengo oilfield as previously announced has identified five discrete phases to increase production, including one phase of primary recovery in un-depleted zones, two phases of secondary recovery and two phases of well stimulation which will aid both primary and secondary productivity. Recovery factors of 20% for primary depletion and 40% for secondary recovery have been estimated for the Ayoluengo sands.
As reported in the initial determination of STOIIP, the Ayoluengo oil field has multiple stacked reservoir sands and different recovery techniques will be required to maximise the remaining recoverable reserves from all four primary sands. The five phase enhanced recovery program will target maximum primary recovery in the Sargentes, Unit A and Unit C sands, maximum secondary recovery in the Ayoluengo sands and possibly partial secondary recovery in the Sargentes sands.
Based on this new study of remaining oil in place, the historical low depletion in the four primary reservoir sands and the identification of potential new enhanced recovery approaches, LGO is increasing the potential incremental recovery target from the field from 10% to 15%. This represents an increase of 5 mmbo above the previously stated potential target of 10 mmbo incremental recovery to 15 mmbo.
LGO has a 100% interest in the La Lora production concession which contains the Ayoluengo producing oilfield.
Development Acreage
As announced on 21 October 2008, 10 prospects were identified across all acreage in Spain with a un-risked total STOIIP of 74 mmb and GIIP ("gas initially in place") of 4bcf. The recoverable prospective and contingent resources across these prospects have a total un-risked mean volume of 12.8 mmboe and are in addition to the new recoverable reserves target for Ayoluengo.
Preliminary approval has already been issued by the Spanish governmental ministries to progress these programs with final permitting due to be completed in Q1 2009.
LGO has an 85% interest in all the Spain Exploration Permits including the Basconcillos H, Huermeces and Valderredible acreage, with Tethys Oil Spain A.B. retaining the remaining 15% equity.
David Lenigas, Executive Chairman, commented:
"The production allocation study on Ayoluengo has provided invaluable information on the un-depleted zones across the field and where our enhanced recovery program can be focused in order to maximise incremental production."
"The very low historical recovery factor of only 15% is excellent news and increasing our full field recovery target from 25% to 30% marks a further positive step change in the potential of our Spanish operations, a key part of the overall LGO portfolio."
"We are also now in the final stages of developing and permitting the 2009 work programs for accelerating the developments of four other prospects near to Ayoluengo."
Competent Person's Statement:
The technical information contained in this announcement has been reviewed and approved by Fraser S Pritchard, Executive Director (Operations) for Leni Gas & Oil Plc (member of the SPE) who has 20 years relevant experience in the oil industry and by Andy Spriggs, Managing Consultant at TRACS International Limited (member of the SPE and PESGB) who has 19 years relevant experience in the oil industry.
Enquiries:
Leni Gas & Oil plc
David Lenigas, Executive Chairman
Tel +44 (0) 20 7016 5103
Beaumont Cornish Limited
Roland Cornish / Rosalind Hill Abrahams
Tel +44 (0) 20 7628 3396
Mirabaud Securities Limited
Rory Scott
Tel +44 (0) 20 7878 3360
Pelham PR
Mark Antelme
Tel + 44 (0)20 3178 6242
NOTES TO EDITORS
Leni Gas & Oil Plc is an international oil and gas exploration, development and production company headquartered in London, trading on the London Stock Exchange's AIM index. The Company has assets in the US Gulf of Mexico and Lower 48, Spain, Trinidad, Hungary and Malta. LGO's strategy is delivering growth through the acquisition of proven reserves and the enhancement of producing assets in low risk countries.
Related Shares:
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